American Title Insurance System

Title insurance originate in the United States, it is derived from the initial title assurance forms - title abstract, title opinion, title guarantee. In the United States, the Caveat Emptor Principle which is developed in the chattel transaction extended to applicable to real estate transaction. So the duty of checking flaws in title property falls to assignee. Once assignee is satisfied with the checking result and sign a contract to receive the deed, he is going to take a risk that is caused by other rights exist in real estate. The method to ensure assignee against adverse consequences of title property flaws is called title assurance. In present days, the dominant title guarantee method is title insurance in most American states. Title insurance is the sole insurance which originates from America, though it is similar with other insurances, it also has some different characteristics because it is produced in title trading and financial field.The thesis can be divided into four chapters.Chapter One introduces the institutional basis and the historical background of title insurance. In practice, the system of registration of demurrer is very complex and perplexed, not all of registration documents are constructive. Therefore title guarantee system is vital to real estate trade. Nevertheless, there is no property guarantee method can protect assignee absolutely in practice; every method has its own disadvantage and limitation. For protect property rights more safely and effectively to promote the development of real estate market, title insurance system emerged as the times require and has been popular in the United States.Chapter Two introduces the basic content of title insurance system. It contains the concept of title insurance, the characteristics, varieties, scope, title search and Accept insurance mechanism, at the same time it introduces ALTA unified property insurance policies. Essentially, Title insurance is one kind of indemnity contracts relations with guarantee properties, it is a certain amount of the premium paid by policy-holder to underwriter (insurance company) one-time, Property insurer promises he will eliminate title right defects and solve title dispute if there is certain loss that is caused by the no-recorded defects and disputes which should be recorded, or property insurer gives compensation in the range of insurance amount. Actually title insurance guarantees the accuracy of the title report. Property insurance profit form is not the balance between insurance premium income and operating costs which include compensation, but the profit comes from title investigation, consulting and evaluation premium. Strictly speaking, title insurance does not belong to the traditional insurance category in essence.Chapter Three analyses the system value of title insurance. Title insurance can clear property status, promote transaction, promote real estate market financing, protect insurant from unnecessary loss, which manifests its important functions-- avoiding risk function, collecting information function, service function and dispersing risk function. At the same time, title insurance made an important contribution to the development of American second-hand housing market and secondary mortgage market.Chapter Four introduces the international development of title insurance. Title insurance has become one component of real estate trading in dozens of countries, International title insurance use quantity increased dramatically in the past few years. International title insurance is different from American domestic title insurance,it met some problems during development. To advance title insurance internationally the most effective way is that combine title insurance with local legal system, judicial environment, trading habits, and some other practices, to realize title insurance prevention or dispersed risk function and service function through integration mode to realize title insurance of localization gradually. At last, the thesis also analyses the development feasibility of title insurance in China. Title insurance is important for improving Chinese registration system of real property and establishing housing mortgage securitization market.